China - Set To Introduce Gold-Backed New World Reserve Currency...

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The US dollar has been the world’s reserve currency for many decades now, but the trends seems to indicate that China is preparing to overtake the US in regards to being the “standard” currency. The world’s monetary system has not had any direct involvement with gold since 1971, when U.S. president Richard Nixon ended the conversion of the dollar into gold.

China seems to be preparing itself for a big involvement in gold, potentially backing their currency with gold. This simple graph below shows that world reserve currencies come and go, and they change on average every 95 years.

It is impossible to know exactly how much gold China has, as their central bank is more secretive in this regard compared to other countries. The last “official” announcement of their gold holdings was in 2009, and it was reported as 1,054 tons.

Those figures would currently put China in the number 6 spot on the list of countries who hold the most gold. However, Matt Insley at Agora Financial put together an estimate based on import figures, mining production figures, as well as more stealthy forms such as black-market gold from Africa and the fact that China urges it’s citizens to own physical gold.